Crisis time for Microsoft

Microsoft have also become increasingly powerful in the server market. Their consumer offerings have languished, except for the Xbox, but their business tools have grown considerably in revenue in the past decade.

And, of course, as long as Gates is Chairman, Ballmer isn't going anywhere unless he wants to.

This is the real secret to his success.

The profit and revenue numbers one may cite under his reign are impressive, but they should have moved the stock. That they haven't over this long a time frame means that all the gains under Ballmer were expected and that any old average CEO would have achieved them. In short, the market seems to have assumed that MS would be here and done so years ago.

He has not done diddly in terms of the strategic threats to MS' future (unless W8/WP pays off very big) and has instead made large investments in markets that really aren't game changers (Xbox anyone?).

Whether his tenure is really remembered outside of the fawning flacks inside the company as something special is going to be decided by the reception of W8/WP8. If he retired tomorrow, he would be seen as a kind of also-ran CEO.

What I don't understand is how Steve Ballmer can keep his job having guided the company from absolute dominance to, at best, one of three minority players in personal computing. This is the real crisis at Microsoft, a unrecoverable failure of leadership, and one that doesn't appear to be changing anytime soon.

Likely because over the past decade, Microsoft has gone from $28b (2002) in revenue to $73b in revenue (2012). With the exception of a year during the downturn, Microsoft has consistently increased revenue every year it has existed under Ballmer's leadership.

160 percent growth over a decade looks pretty good, until it is measured against losing two markets that will both be larger than the market for traditional PCs in a year or two.

During the past decade, Microsoft has gone from a non-player in the console/living room entertainment arena to successfully taking on the traditional powerhouses, and even beating them.

They have also gone from having no presence in enterprise line of business software to having a range of system that is considered some of the best in the market. Enough to take Oracle and Siebel on directly, and win.

IIS is still second only to apache for running public websites. Azure and SkyDrive are both doing quite well in their respective cloud arenas, with clients like Apple using them.

I definitely grant that Microsoft isn't winning everywhere, but it's absurd to talk about losing two markets without pointing out that it's winning in others.

I don't see how the magnitude of this failure is disputable. Would anyone be arguing things weren't so bad if Windows found itself on a third of traditional PCs instead of 95 percent? Because Windows isn't even doing that on handheld and tablets, not even a Mac share of five percent. The best case scenario is 20 percent of everything in 2016. What a legacy for Steve Ballmer. Should make a great course at Harvard Business School.

I don't see how the magnitude of this failure is disputable. Would anyone be arguing things weren't so bad if Windows found itself on a third of traditional PCs instead of 95 percent? Because Windows isn't even doing that on handheld and tablets, not even a Mac share of five percent. The best case scenario is 20 percent of everything in 2016. What a legacy for Steve Ballmer. Should make a great course at Harvard Business School.

I still think you're way too myopic looking at Windows as the sole bastion of Microsoft presence. Their enterprise apps are either cross-platform, or their next release is cross-platform. They openly acknowledged years ago that it will be a cross-platform world we live in, and they're a part of that.

Ballmer's chief flaw, if you want to simplify it, is that he puts far too much value in Office and Windows as names. He confuses "has to use it" with "wants to use it."

The Surface (and really, Windows RT as a whole) is designed and programmed on the assumption that the public has been craving, dying for Office and a hardware keyboard to make a tablet worthwhile. Its broader tablet initiative presumes that people want "a PC" (read: Windows). Microsoft completely reinvents its mobile platform and calls it Windows Phone, both for (then-eventual) Windows 8 synchronicity and the assumption that the Windows name can carry weight in mobile. Even the company's first logo change in decades puts Windows before the Microsoft name. Ballmer is regularly overseeing these strategies, if not directly ordering them, and it's clear even in conversation that he treats Office and Windows almost more as laws of gravity than products to sell -- that you'll automatically choose them because of some innate worth.

But, at least from early performance, it seems like that one truism about Windows is being demonstrated in action: many don't actually care about Windows as a brand. They usually buy Windows PCs because they have to, or because they're cheap. Those 400 million PCs expected to ship during Microsoft's current fiscal year? A lot of them will still be replacements for old hardware. A new version of Windows is often a coincidence next to the real reasons people upgrade: broken or slow PCs. Windows never became a must-have on phones or tablets to start with, and its advantages arguably die off in mobile -- so Ballmer's "of course you'll buy it! It's Windows!" strategy falls on deaf ears. Arguably, many people are buying iPads and Nexus 7s to get away from Windows, not in the hopes that either will eventually behave like Windows.

While Apple and Google are certainly guilty of treating elements as sacred cows, they're willing to do something that Ballmer isn't -- accept that a major brand or product won't last forever. Apple doesn't mind declining iPod sales or even potential cannibalization of Mac sales by iPads, because it's only concerned about being where the industry is going (or Apple thinks it should be going). Google is willing to pour huge sums of money into Google Glass, something that doesn't have much of a link to Android or Chrome OS, because it thinks that's where computing is going next.

Microsoft under Ballmer, meanwhile, deliberately neutered or killed projects like the Courier and Kin because they were Not Windows, and therefore evil incarnate. He hasn't always demanded these changes first-hand, but even letting the Windows team bully others around reflects a flawed strategy of trying to shelter the incumbent product by silencing new ideas. The delays and limitations created by that must-be-Windows approach may force Microsoft to sit out the shift to mobile, and by definition the next wave of computing.

Ballmer's chief flaw, if you want to simplify it, is that he puts far too much value in Office and Windows as names. He confuses "has to use it" with "wants to use it." /snip

There's some wisdom here, but also some stuff that I think is overstated. I think merging the tablet and desktop interfaces, and releasing a tablet designed to be as handy with a keyboard as without, is proper, turns the tablet into a productive (rather than a consumptive) device, makes it far more flexible, and is in general, where the industry is going to go. And Office, the be all and end all of productivity suites, is necessarily going to be part of that. What I do agree on, though, is that it didn't need to be called "Windows", and in fact, there's nothing "Windows" at all about the Windows Phone OS or Windows RT. They would have been far better off calling it the "Surface OS". It's time to make that break.

While Apple and Google are certainly guilty of treating elements as sacred cows, they're willing to do something that Ballmer isn't -- accept that a major brand or product won't last forever. Apple doesn't mind declining iPod sales or even potential cannibalization of Mac sales by iPads, because it's only concerned about being where the industry is going (or Apple thinks it should be going). Google is willing to pour huge sums of money into Google Glass, something that doesn't have much of a link to Android or Chrome OS, because it thinks that's where computing is going next.

Microsoft under Ballmer, meanwhile, deliberately neutered or killed projects like the Courier and Kin because they were Not Windows, and therefore evil incarnate. He hasn't always demanded these changes first-hand, but even letting the Windows team bully others around reflects a flawed strategy of trying to shelter the incumbent product by silencing new ideas. The delays and limitations created by that must-be-Windows approach may force Microsoft to sit out the shift to mobile, and by definition the next wave of computing.

I think you're conflating ideas here. Ballmer has definitely sacrificed on the altar of Office and Windows before, but to say that only happens is dated. Courier was killed off because it was a research project, and its fundamental design to not be an email platform was dumb. Kin was killed off because the implementation was terribad, and it didn't make sense to have it when MS was pushing a true smartphone platform in WP7.

As for Google, Android is a side project. Of course Google is willing to pour money in to Glass, because Chome, Chrome OS, and Android are all fundamentally side projects for Google's main business plan. As for Apple, the iPhone (and honestly before it, the iPod) at its core represented a fundamental shift away from Macs. It's what saved Apple. Quite literally. So for them to make that transition not only required for them to bring back one of the strongest personalities in the business, but to also face a do or die situation for the company.

Microsoft has neither problem. They are not in a do or die situation, nor do they need to kill their sacred cows yet. Furthermore, they have risked a lot by putting a ton of their consumer efforts into the XBox brand. Windows 8 for the end user is likely to be sublimated into the XBox brand, especially if the rumors about an XBox-branded gaming tablet are even remotely true.

Now this is not to say that MS is immune to problems in the tablet space. The phone space proves that. To me, the biggest question is if MS will finally decide to own the stack. There are risks and benefits to both approaches, but for MS's business strategy, owning the stack seems like an obvious win in the consumer space. Buy Nokia, buy RIM, and focus on enterprise and technical users for Windows Phone and Tablets and watch the market take off. While Apple and its iPad is a decent idea for a tablet with its bottom-up design when it comes to interface, I think in the next few years, the limitations of such will become painfully obvious. The question is who picks up that slack. My personal opinion is that MS is the best situated to do so, because of their stance that the tablet is just another PC. (disclaimer, this is a drunk post)

There's some wisdom here, but also some stuff that I think is overstated. I think merging the tablet and desktop interfaces, and releasing a tablet designed to be as handy with a keyboard as without, is proper,

I simply don't agree that Surface is as handy with a keyboard as without. With a dearth of touch apps and non-too-impressive hardware specs, it's selling points are Office RT which is really only effective with the keyboard/touchpad, and it's other major selling point - the kickstand - is obviously meant to be used on a table with the keyboard/trackpad.

The very nature of the size restriction of a tablet means that if you want a physical keyboard + pointing device, it's going to be limited in many ways compared to a laptop. When you want to use a keyboard, it can't be positioned well on a lap, the trackpad will have to be very small in an era where they're only getting bigger if it's going to be attached to the tablet. If you keep a desktop interface around it's going to intrude when you're using it as a tablet, in the case of Surface intruding on the tablet interface when you don't want it to and adding complexity, or possibly making it easy for lazier developers to "support" your platform without really taking advantage of the touch interface fully (cough: Office RT).

I really don't understand how many more tens of millions of iPads will be sold before MS fucking understands that addition by subtraction brings focus. You may completely compromise one aspect of a design that will alienate a possible market segment, sure - but then that could mean you knock the other elements of the design out of the park. That's exactly what Apple did with the iPad, and if they tried to go the half-baked route with Surface there's no way in my mind it would have had the success.

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turns the tablet into a productive (rather than a consumptive) device, makes it far more flexible,

turns the tablet into a productive (rather than a consumptive) device, makes it far more flexible,

It also makes it damned awkward.

In two sentences, I think this is the essence of the whole "was Jobs right" debate. Is it flexibility or is it awkwardness? The consumer is now in a position to choose sides; I doubt if either side is "zero" but it will be interesting if one "side" turns out to be overwhelmingly larger than the other.

I wonder, too, if there may even be a few souls who end up with both devices. For a lot of consumers, a Mac Mini and a Surface, say, are affordable if they somehow decide they have use cases justifying both. Wonder how big that demographic turns out to be. If it is non-trivial, I wonder how many heads around here explode.

But, at least from early performance, it seems like that one truism about Windows is being demonstrated in action: many don't actually care about Windows as a brand. They usually buy Windows PCs because they have to, or because they're cheap. Those 400 million PCs expected to ship during Microsoft's current fiscal year? A lot of them will still be replacements for old hardware. A new version of Windows is often a coincidence next to the real reasons people upgrade: broken or slow PCs. Windows never became a must-have on phones or tablets to start with, and its advantages arguably die off in mobile -- so Ballmer's "of course you'll buy it! It's Windows!" strategy falls on deaf ears. Arguably, many people are buying iPads and Nexus 7s to get away from Windows, not in the hopes that either will eventually behave like Windows.

Exactly. I've never met anyone who really cares about Windows - they use it because:

1) They have to.2) It's cheap.

Meanwhile while it's a very small group, the few people I know who switched to Macs or got iPads just fucking love them. Windows, for whatever reason (and OEM's play a part no doubt), doesn't inspire passion.

The only Windows-related users I see that are somewhat passionate about the platform and are ardent defenders of it ironically are PC gamers - the users that MS has basically washed its hand of and is trying to - again and again with failure - drive the Xbox brand into their faces.

Windows, for whatever reason (and OEM's play a part no doubt), doesn't inspire passion.

Passion is always in short supply when it comes to computers.

I think it is likely, no more than a couple of years hence, that iPads will be treated with about the same degree of contempt (and at least sometimes for the same reasons) that Windows is.

Up to now, buying Apple has been a brave trip to minority acres. From here forward, buying one will be as mainstream as it gets. Historically, that changes the relationship of the public and the device/OS.

I can't remember any mainstream computing device (going all the way back to the very successful OS/360) that didn't garner the same disdain as Windows does now. To some extent, the brand leader is always the enemy; at the least, it seems to inspire indifference.

If Apple avoids that over the long haul, it will have done something. Right now, the signs are actually fairly good, but it's a long forever out there.

the kickstand - is obviously meant to be used on a table with the keyboard/trackpad.

It's really not. I have a tablet and I wished it had a built in kickstand. Right now I always have to hold it in my hands even when I'm watching some video and doing no interaction whatsoever with it. When I go outside and drink a coffee in some bar I want to put it in kickstand mode while I'm doing something else with my hands.IMO a built in kickstand is a must for tablets and has little to do with typing.

I wouldn't say wonderfully. They're clunky and crap that you always need to carry around while a built in kickstand gets out of the way and doesn't really add weight or make the device thicker.

The kickstand definitely adds weight and thickness, you can't have an infinitely thin kickstand. The smart cover also supports two different positions and, best of all, is removable. As for the iPad being as thick as the Surface, the iPad has the extra thickness to support the retina display, it needs the extra batteries. If you wanted, you could have an iPad 2 with a smart cover and it would be roughly as thick and heavy as a Surface.

I don't see that as a good thing. It's actually why I think it sucks. There have been many occasions when I wanted a build in one. For example, watching a youtube video in the couch, get up and go the the kitchen to prepare something quick to eat while keep watching the video. So obviously want the tablet to stay in kickstand mode because my hands are busy but I have to go back in the living room and search for the smart cover, I don't keep that thing always with me.

Smart covers are a clunky and cheap hack. They are not comfortable to use at all. IMO this sounds like the typical we don't need X until of course Apple adds it in the next devices than yeah, I guess it makes sense now. I've heard the same thing with things like notification center or the size of the iphone screen.

I don't see that as a good thing. It's actually why I think it sucks. There have been many occasions when I wanted a build in one. For example, watching a youtube video in the couch, get up and go the the kitchen to prepare something quick to eat while keep watching the video. So obviously want the tablet to stay in kickstand mode because my hands are busy but I have to go back in the living room and search for the smart cover, I don't keep that thing always with me.

So what you're saying is you took the smart cover off? If you want it to be non-removable, don't remove it, it's pretty simple. If you don't like the way the smart cover does it, there's plenty of cases out there that feature a built-in kickstand. This way, we're not stuck with just one type of kickstand that holds the device in only one position.

As for cheap hack, tell me how to use a Surface at a shallow angle again? Oh.

If you want it to be non-removable, don't remove it, it's pretty simple.

The difference between a build in kickstand and a tablet + smartcover is that one is light and thin and the other is thick and clunky.

There are a lot of things I criticize the surface for but the kickstand is not one. Maybe its implementation may get better with adding more angles for example but the concept is solid.

Anyway my original reply was to a post that says the kickstand is there only to use the tablet with a keyboard and I disagree. It serves other purposes too, like watching a video without having to hold the tablet on your hands or attach some smart cover to it.

The difference between a build in kickstand and a tablet + smartcover is that one is light and thin and the other is thick and clunky.

The kickstand on the Surface also traps your fingers (edit: I mean more like pinch finger rather than trap it) if you're not careful. The smart cover is around 1mm thick, so it's not like it's going to add a massive bulk to the iPad.

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There are a lot of things I criticize the surface for but the kickstand is not one. Maybe its implementation may get better with adding more angles for example but the concept is solid.

It's a nice thing to have, but the notion that every tablet should have a built-in kickstand is terrible. How do you reconcile a built-in and unremovable kickstand with the notion that people may want to stand the device up in portrait or landscape mode, depending on what they prefer?

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Anyway my original reply was to a post that says the kickstand is there only to use the tablet with a keyboard and I disagree. It serves other purposes too, like watching a video without having to hold the tablet on your hands or attach some smart cover to it.

Attaching a smart cover is hardly a massive effort and, when not in use, it acts as a screen protector.

The difference between a build in kickstand and a tablet + smartcover is that one is light and thin and the other is thick and clunky.

The kickstand on the Surface also traps your fingers if you're not careful. The smart cover is around 1mm thick, so it's not like it's going to add a massive bulk to the iPad.

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There are a lot of things I criticize the surface for but the kickstand is not one. Maybe its implementation may get better with adding more angles for example but the concept is solid.

It's a nice thing to have, but the notion that every tablet should have a built-in kickstand is terrible. How do you reconcile a built-in and unremovable kickstand with the notion that people may want to stand the device up in portrait or landscape mode, depending on what they prefer?

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Anyway my original reply was to a post that says the kickstand is there only to use the tablet with a keyboard and I disagree. It serves other purposes too, like watching a video without having to hold the tablet on your hands or attach some smart cover to it.

Attaching a smart cover is hardly a massive effort and, when not in use, it acts as a screen protector.

A cover that covers? Revolutionary!

I'm sure EdlAk is right, without a piece of metal on the back that folds out, iPad is doomed.

But if 'attaching some cover' is as bad as he says, obviously attaching 'some keyboard thing' to Surface is a no go. Pity.

I don't feel safe with the Smart Cover on my ipad propping it up vertically. It's a bit too vertical for my taste. It feels like it is always moments from falling over forward.

Honestly, I've never felt that, except on bumpy trains. I just stood it up and tried to poke it over, it needs a fair bit of effort to push it over. I can appreciate the feeling that it's too vertical from an ability to see viewpoint, unless you're close to level with it or a few feet away (maybe 3-4), you need to be pretty level with it to see the screen well.

That said if there were 2 versions of ipad 5, one with kickstand and the other without one I would pick the one with the kickstand. Is not something that will make or break the ipad like the lack of SD wasn't either but it is nice having it if possible.

It's very unlikely Apple will offer a kickstand on the iPad, their MO these days is retina displays and having as thin devices as possible. Anything that gets in the way of those has a pretty steep built-in penalty.

That said if there were 2 versions of ipad 5, one with kickstand and the other without one I would pick the one with the kickstand. Is not something that will make or break the ipad like the lack of SD wasn't either but it is nice having it if possible.

I'm not twisting, mate, I'm just sending you up. If you want me to take you seriously, don't carry on as if iPad's Smart Cover is hard to use, or, you know, not a cover ...

It's very unlikely Apple will offer a kickstand on the iPad, their MO these days is retina displays and having as thin devices as possible. Anything that gets in the way of those has a pretty steep built-in penalty.

They already have retina displays and the devices are already really really thin. I mean how much is a kickstand going to add to the size really.

I don't feel safe with the Smart Cover on my ipad propping it up vertically. It's a bit too vertical for my taste. It feels like it is always moments from falling over forward.

Honestly, I've never felt that, except on bumpy trains. I just stood it up and tried to poke it over, it needs a fair bit of effort to push it over. I can appreciate the feeling that it's too vertical from an ability to see viewpoint, unless you're close to level with it or a few feet away (maybe 3-4), you need to be pretty level with it to see the screen well.

They already have retina displays and the devices are already really really thin. I mean how much is a kickstand going to add to the size really.

Somewhere between 10-15% of the thickness, judging from that picture. It's also something that can break off, which is another thing that Apple really isn't keen on these days.

Edit: regarding really thin, the large iPad is already considered too thick and heavy by many people and adding a kickstand to something like the iPad mini would take it from 7.2 to probably 8 or more mm thick.